Collecting rent is one of your primary sources of income as a landlord. While you might offer extra services to your tenants, rent payments are vital to your success. For this reason, the importance of having a reliable way to collect rent payments from your tenants every month cannot be understated.
Recently, more and more landlords are turning to digital options when it comes to rent collection. There are a number of reasons why paying rent online as opposed to more traditional methods like collecting checks has skyrocketed in popularity. Below are four of the biggest benefits that will convince you to make the switch to online rent collection if you haven’t already.
- Make Rental Payments Automatic
As a landlord, the hassle of late fees is something that you would be better off without. You might be surprised to know that your tenants probably feel the same way. Online rent collection platforms often allow tenants to set up automatic recurring charges whenever their rent is due, meaning that payments become automatic.
Automatic payments mean that the forgetfulness of a tenant is no longer a factor. Having the option to make automatic payments helps to make online methods an easy sell for tenants who do not want to deal with late fees. The process of payment is streamlined. It is easier for the tenant and it gives you the peace of mind that your payments will come on time.
- Your Tenants Will Pick It Up Easily
If you have been using traditional rent collection methods up until this point, you might be hesitant to move rent collection onto an online platform and that your tenants might be unfamiliar with. However, in reality, online transactions are becoming increasingly common in everyday life, and tenants are likely to be intuitively familiar with property management software that is designed around making site navigation easy as possible.
While property management software is a reliable option for setting up online rent payments, some landlords have taken advantage of peer-to-peer (P2P) software like PayPal or Venmo. These platforms are bound to be even more familiar to the average tenant, who likely already uses these apps in their everyday lives.
However, if you are considering an app like Venmo or PayPal, it is important to remember that P2P platforms are not designed for landlords and do not allow you to enforce late fees. They also introduce a multitude of legal issues, so it’s best to stick with tried-and-true online rent payment portals.
- Run Your Business from Anywhere
Moving rent collection to an online platform means that rent can be paid and collected from anywhere with an internet connection.
For example, if you collect rent by having your tenants drop a check in a mailbox, that places serious limits on both tenant and landlord for how the transaction can be completed. If you use property management software that can be accessed via a browser or on your phone, tenants can make rent payments from work and you can collect them from home, giving both of you great flexibility and minimizing inconveniences that could lead to late fees.
- Automatic Record-Taking
Whenever a transaction is made, an online rent collection tool automatically keeps records that track the information of the payment, including the creation of a timestamp, receipts, and invoices. These records can be accessed as a payment history at any time going forward.
This is arguably the largest benefit of using online methods. Keeping track of rent collection and all of the details that go along with it can not only be a pain, but it is also susceptible to human error. It is incredibly important to keep accurate records of a tenant’s payment history, and online platforms can do all of that work for you.
Since invoices and receipts are often also generated for the tenant, these automatic records also have the benefit of increasing your transparency as a landlord, which can go a long way in building trust and helping your business in the long run.
The switch to collecting rent online is not incidental or random. Many landlords are taking advantage of benefits that make rent collection an easier, automated process for both themselves and their tenants. If you are still relying on traditional methods of rent collection, now is as good a time as any to make the switch to online.